Fibre to the home and office creates new revenue opportunities for ISPs

Fibre to the home and office creates new revenue opportunities for ISPs

Internet service providers (ISPs) are likely to benefit from a range of new revenue opportunities as fibre to the home and office becomes more commonplace in South African metros.

That’s according to Mark Tinka, Head of Engineering at SEACOM. He says that the replacement of copper cable infrastructure with fibre will enable ISPs to deploy a range of innovative solutions and pricing models that could help to boost their revenues and profits.

Tinka says that the physical limitations of the legacy copper infrastructure – including the degradation it suffers in quality over longer distances and limitations in the bandwidth it can offer – have put constraints on the sort of services ISPs have been able to offer in the past.

But fibre is better suited for long distance, high bandwidth connectivity, bringing with it boundless bandwidth that is only really limited by the capabilities of the equipment on either side of the line, says Tinka. That means ISPs can either offer more bandwidth to their clients for the same cost, or lower their prices so that customers can consume more bandwidth.

“With the growing popularity applications such as videostreaming and video-on-demand, it is becoming important for ISPs to deliver more bandwidth to their customers,” says Tinka. “Providing a smooth experience on these services is the best way for an ISP to ensure customer loyalty and to grow revenues.”

Tinka says that one massive advantage of fibre over ADSL over copper cable is that it enables ISPs to offer symmetrical upload and download speeds. Up until now, most ADSL customers – small businesses and consumers – have had access to far less upload than download bandwidth.

For example, customers with an ADSL line with a 10Mbps download speed from Telkom have a peak upload speed of only 1Mbps. These low-end upload speeds are out of sync with a world where Internet users are creators of content as much as they are consumers of information, says Tinka.

“With the introduction of Facebook, Flickr, YouTube, and so on, people want to spread and share content,” he adds. “Slow upload speeds are a frustration for them and an opportunity for ISPs.” This trend is about connectivity between people rather than access to content. “Today, connectivity, not content, is king,” says Tinka.

Tinka says that the untapped demand for bandwidth-rich services means that there is an excellent business case for investment into fibre for national operators and potentially for ISPs as well.

SEACOM sees its role in this regard as providing wholesale connectivity services that will ensure ISPs have plenty of high quality bandwidth to supply their retail customers once fibre to the home is in place, says Tinka.

New and innovative partnerships between governments, the private sector and multilateral financing institutions are vital to improving broadband penetration and boosting investment in telecoms infrastructure......